Hong Kong bourse to buy London Metal Exchange for $2.18 billion

The Hong Kong Stock Exchange (HKEx) yesterday announced plans to buy the London Metal Exchange (LME) in a deal valuing the 135-year old commodities Exchange at €1.4 billion ($2.18 billion).

HKEx and Clearing Ltd, as the exchange is known, is offering £107.60 for each of the 12.9 million shares of LME.

HKEx proposes to fund the acquisition through cash at hand and new bank facilities of at least £1.1 billion.

The deal needs to be approved by 75 per cent of LME's 92 members that include miners like BHP Billiton, Chilean copper giant Codelco, banks such as Goldman Sachs, JPMorgan Chase & Co and Barclays, among others.

The merger brings together LME, the world's leading non-ferrous base metals exchange trading venue, with the leading operator of exchanges and clearing houses in Asia.

In September 2011, LME, the world's top market for industrial metals, had received multiple takeover proposals and was considering selling itself.